Performance Team

The case for a performance team

Talent is a force multiple for a company - it shouldn’t sit under HR, but it should be a core priority of the CEO’s office.

Early on, we found that a strong team of generalist problem solvers was best positioned to think about performance holistically (KPIs, incentives, talent framework) and build elegant, structured processes around it, instead of assigning different aspects of it to teams within HR.

We recommend setting up a performance team (can be even just one person at the beginning) reporting directly to the CEO and looking at all aspects of performance separately from HR/recruitment.

Responsibilities

The team needs to be responsible for all matters that are related to performance, including:

1. the performance system; building and running all processes, infrastructure, and tools necessary for performance evaluation. You will need someone to initiate reviews, chase managers, gather feedback, analyse data and present reports.
2. the incentives; this team will determine what compensation for A-players will look like and how resources will be distributed to ensure fair salaries.
3. the quality assurance of KPIs; when performance is treated like science someone needs to ensure that the metrics used are robust. The performance team should not set KPIs by which employees are evaluated but act as a “quality assurance” function on how these are used in the company overall.

Team structure

When you have less than 100 employees, you can get away with a single person - a relatively junior ops manager or a founder associate to set up the performance mechanism and ensure that it is running smoothly.

As you grow beyond 100 employees, you’ll need a fuller team to manage existing processes, and to build scale-proof performance infrastructure that will survive as you 10x your workforce. You should consider appointing a proper Head of Performance, who will become a key point of reference for your managers and execs.

Beyond 500 employees your performance team will need to grow and specialise in two verticals:

1. Performance will keep focusing on KPIs, performance reviews, and other aspects of performance. Good operators will remain the core roles in this team.
2. Compensation will focus on administering equity grants, maintaining salary benchmarks and handling the process around raises. The types of resources working in this team can be traditional HR/back-office profiles, but you will need at least one expert on equity grants to manage your growing pool of employee stock incentives.

As the company grows even further, the HR department should have a dedicated team for compensation, handling day-to-day operations. The Performance team remains responsible for all core decisions and frameworks around compensation.

Team profiles

No matter the structure, you will need a group of smart, hardworking people who will tackle performance holistically. The team should be staffed with strong operators (or ex-consultants), skilled at building processes and analysing data.